Relief for Nippon India MF as SAT sets aside Irdai order in pledging case

A corporate guarantee was given by RCap and put option right was given to the NCD holders. This meant that RCap will be required to purchase the NCDs when the option is exercised

Nippon India Mutual Fund (MF) has got relief from the Securities Appellate Tribunal (SAT) on Thursday in a pledging case where the fund house had extended maturity of non-convertible debentures (NCDs) of former group company — Reliance Home Finance (RHF) — against pledging of Reliance Capital’s (RCap’s) holding in Reliance General Insurance Company (RGICL).

The matter pertains to NCDs of RHF, which were maturing on June 28, 2019. The home finance company was unable to meet its payment obligations. Subsequently, the maturity was extended to October 31, 2019, against additional security of RCap’s holding in RGICL.

Further, a corporate guarantee